A&A recently received judgement in a matter in favour of the executor of a deceased estate, pursuant to a property transaction concluded in 2006 between the deceased (the transaction occurred during the life of the deceased client) and a purchaser of an immovable property situated in the upmarket security estate, in the eastern suburbs of Pretoria.

Briefly, the deceased (“the client”) and the purchaser, a Trust (represented by one “M”) concluded an initial agreement of sale in terms of which the deceased sold his home to the Trust for an amount of R4 million. There were subsequent discussions between the parties which resulted in an addendum to the agreement of sale being concluded, 4 months after conclusion of the initial agreement. In terms of the addendum the purchase price would be paid by way of a guarantee for R3 million, with the balance of R1 million to be paid 45 days after registration of transfer.

M advised the client that the trust required some time to pay the balance and that, if the client was prepared to grant the Trust the 45 day period to pay the balance of R1 million, he (M) would assist the client with the financing of a property transaction in Zanzibar. M was allegedly well equipped to assist the client with his off-shore financing requirements.

A round table meeting was held between A&A and M who pointed out, in no uncertain terms, that A&A’s views on the apparent invalidity of the addendum (the firm held the view that the addendum was invalid, by virtue of a technical difficulty), were disputed and that he would hold the seller to the addendum agreement concluded between them. A similar objection to the validity of the initial agreement was raised by the client’s erstwhile attorneys. A&A then prepared a draft agreement in an attempt to address the difficulty in question. M steadfastly refused to sign such addendum. He pointed out to the representatives of the firm that he had many years’ experience as a businessman and was, in fact, legally qualified, having allegedly obtained a law degree earlier in his career.

For many months thereafter and without paying a market related rental, M stayed in the deceased’s home and delayed transfer from being taken until roughly middle of 2009. Before taking transfer, he raised the issue of the property allegedly not complying with the required regulations as regards the electrical wiring thereof. This notwithstanding the fact that he had, by this time, already stayed in the property, together with his wife, since November 2006 without ever raising any complaints in this regard. When A&A tried to have this remedied by sending out an electrical contractor to remedy the defects and have an electrical compliance certificate issued, M continuously frustrated such attempts in having this issue resolved.

By this time the firm had become suspicious of the purchaser, due to his apparent mala fides and it was therefore no surprise when, 45 days after the property was transferred, the Trust failed to make payment of the balance of R1 million.

A first court application to evict M was unsuccessful. A second application was launched by A&A on the client’s behalf who had, in the meantime, passed away. That application was referred for hearing of oral evidence by agreement and went on trial on the 23rd of March 2012, and was concluded 2 days later.

The court made a credibility finding against M who, it transpired in court, some 2 years after the meeting with the representatives of A&A, deposed to an affidavit alleging that he had on-sold the immovable property to a registered entity in Gibraltar and had allegedly lost a potential profit of almost R2 million, which amount he claimed as contractual damages from the deceased’s estate, due to the alleged delays in furnishing him with an electrical certificate of compliance. A&A conducted searches in the UK and also Gibraltar Companies Houses and such investigations led them to the conclusion that the overseas entity had been de-registered a year before the alleged agreement of on-sale of the property was supposed to have been concluded. The court found that the counterclaim by M on behalf of the Trust was nothing more than a concoction designed solely to found a spurious damages claim and to delay payment of the balance of the purchase price.

The court accepted the evidence of the client over that of M, dismissed the Trust’s claim for damages, granted judgement and ordered that interest be paid by the Trust on the balance of the capital owing to the deceased’s estate since April 2009. The interest on the capital alone amounted to about R390,000.00.

Written by Leander Opperman, partner Adams & Adams